As the financial and banking sector continues to be under pressure, we speak to Institutional Portfolio Manager Naveed Rahman about what this all means for the global markets, central banks and furthermore the benefits of value investing in this type of market environment. Rahman says the Fed’s current path is a complicated one in that it is dealing with very sensitive and fragile financial conditions, especially in the last several weeks. That being said, Rahman says the underlying components of inflation are pretty robust and well above the Fed’s target of 2 per cent. So for Rahman and his team, they think inflation will gradually grind lower but will remain higher historically. Rahman addresses investors' concerns about the latest events in the markets being similar to the financial banking crisis of 2008/2009. He says although central banks are facing similar issues since that time, banks are better equipped today. Plus they are not making the same credit mistakes and bad loans that they did in 2008. Rahman says the team’s analysis suggests it’s not going to be a repeat of that time. Rahman also speaks to host Bryan Borzkykowski about how investors might position themselves in Fidelity’s Global Intrinsic Value Class during these uncertain times. Rahman says the fund focuses on two main pillars - investing in high quality companies that are consistently profitable and investing in companies that will generate their own cash in a market environment where credit markets seize up. He says the fund tries to find that perfect intersection of high-quality companies with the benefit of a lower beta profile.

Recorded on March 24, 2023.

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